Markets Next Week: US Stimulus, Earnings Results, Global Cues To Give Direction

There is uncertainty at the ground and after the US President Trump tested positive for Covid 19, risky assets including stocks were toppled by the most of Nasdaq which dropped over 2.2% in the last session. For Indian markets, last few day's lows were erased lifted by positive global as well as local cues.

For the week ended October 1, 2020, Nifty saw gains to the tune of over 3 percent while Sensex also was up 3.5%. Mid-cap and small-cap stocks too enjoyed the gains. Volatility index also slumped by over 6 percent. This has been the state of Indian indices even as the FIIs turned net sellers in the Indian markets after almost 3 months.

Now for the coming week, market shall get direction from earnings results will shall kick off with IT bellwether TCS and other global cues. Here are some of the events to watch out for that it will likely give guidance to the Indian indices:

1. Quarterly earnings season commences:

TCS is set to declare its second quarterly results on October 7, 2020. On strong deals, transactions in pipline, improvement in margin and better guidance for the upcoming quarter, IT companies are said to report higher revenues for the July-September quarter of FY21.

2. Markets positive on release of stimulus package to support the Indian economy:

Experts expect the dole out of at least 2% of the GDP as another stimulus for India to meet up the pent-up demand and also help the economy come out from the earlier met 23.9% record fall in GDP for the April-June quarter of FY21.

 

3. SC will give its ruling on interest waiver on interest during the loan moratorium:

While the centre has agreed to offer waiver on interest on interest during the loan moratorium, the Supreme Court shall also seek the views of other stakeholders concerned such as banks. Also, the decision shall be taken on allowing extension to the moratorium period.

Any decision i.e. advsere for the banking sector may take the sheen once gain from the banking stocks which were the major gainer with gains of 3.7 percent and IndusInd Bank leading which last settled higher by over 12 percent on Friday. Nifty PSU Bank also closed higher by over 1% during the session.

4. Global cues:

Any progress on US stimulus as well as in the health of US President will be seen with high keenness and any positive outcome will help the US and other Asian markets to recoup previous losses.

So, while the Nifty and Sensex managed to gain for the last week, current volatility levels suggest of positive bias for the broader markets.

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